In this article, we explore the 7 Best Stocks to Buy with “Wide Moats”.
Wide-moat stocks are built around a simple idea: some companies have defenses that competitors cannot easily copy, even when the prize is obvious. Morningstar defines a wide economic moat as a competitive advantage expected to last more than 20 years, while VanEck’s Morningstar Wide Moat framework points to five main sources of durability: switching costs, intangible assets, network effects, cost advantages, and efficient scale. In plain market language, these are businesses that do not just grow; they make it unusually difficult for rivals to take away their economics.
That matters in a market where investors are still sorting durable compounders from companies whose growth depends more heavily on cycles, capital availability, or short bursts of investor enthusiasm. A wide moat does not make a stock immune to valuation risk, earnings disappointments, or sector pressure. It does, however, give investors a useful filter for identifying companies with strong pricing power, customer retention, scale benefits, data advantages, or embedded positions inside critical workflows. Morningstar’s 2026 wide-moat coverage continues to highlight that even high-quality businesses can trade at attractive discounts to fair value, making the category relevant for investors looking beyond short-term momentum.
Methodology
For this article, we reviewed U.S.-listed companies widely recognized for durable competitive advantages, using sources such as Morningstar’s economic moat ratings, the wide-moat index holdings, and company-specific moat commentary. We prioritized stocks with clear, long-term advantages such as switching costs, network effects, intangible assets, cost advantages, or entrenched market infrastructure.
From that pool, we selected the stocks that most closely fit the “wide moat” definition while also offering enough business relevance and investor visibility for a broad stock-market audience. Then we ranked them in descending order of open short interest, sourced from stockanalysis.com.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
7. Fair Isaac Corporation (NYSE:FICO)
Short Percentage of Float: 6.59%
Fair Isaac Corporation (NYSE:FICO) is one of the best stocks to buy with wide moats.
The latest moat-relevant update came on April 28, 2026, when Fair Isaac Corporation (NYSE:FICO) reported fiscal second-quarter revenue of $691.7 million, up 39% year over year, and raised its full-year fiscal 2026 guidance. The company’s Scores segment revenue rose 60% to $475.0 million, while B2B Scores revenue increased 72%, driven mainly by higher mortgage origination scores, unit pricing, and higher mortgage origination volume. Software revenue also rose 7%, with platform software annual recurring revenue up 49% and platform dollar-based net retention at 136%.
That makes the update useful for the wide-moat angle because FICO’s moat is most visible when customers keep paying even as regulators push more credit-score competition into the mortgage market. FHFA said approved lenders may now use either Classic FICO or VantageScore 4.0 on an interim basis, while FICO 10T remains approved and planned for future use. Even with that pressure, FICO’s latest quarter showed strong pricing power in its core Scores business.
Fair Isaac Corporation (NYSE:FICO) provides analytics software, credit scores, decisioning tools, fraud prevention products, and related data-driven solutions for lenders, financial institutions, insurers, retailers, telecom companies, and other enterprises.
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